Setting up a foundation in Qatar – Top Benefits

Setting up a foundation in Qatar – that will be the topic of today’s article.

Setting up a foundation in Qatar provides top benefits for offshore wealth management and long-term wealth preservation.

If you have any questions or want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.

Introduction

Qatar is a small state located in the northeastern part of the Arabian Peninsula. Characterized by a high standard of living, in the ranking of 2012 ranked first in the world average per capita income. The main source of income for Qatar is the export of oil and gas, the rest is occupied by the service sector. The citizens of this state (as well as other states of the region) overwhelmingly profess Sunni Islam, which determines the way of life characteristic of most Muslim countries.

Knowing the approximate figures of the monthly income of the Qataris, many make a simple, but not entirely correct conclusion about life in this Arab state. The opinion of outside observers is: “Qatar is an ideal country, almost a paradise.” However, the first impression is far from complete. The nuances should be understood in more detail.

Qatar is often referred to as heaven on earth due to its climate and advanced economy. That is why immigration and life in Qatar are of such interest to citizens of countries from all over the world. You can apply for a visa to Qatar on your own.

The standard of living in Qatar, its salaries in 2022 allow literally every resident of the country to live comfortably. Prices in Qatar correspond to local salaries.

Doha is scheduled to host the 2022 FIFA World Cup. Many projects are being implemented to build 12 stadiums, increase the number of hotels and their size, and modernize the transport system. They are going to make a contribution in the amount of 20 billion dollars only to the road network!

There is also a plan to build a new city that will be home to 200,000 people.

However, the situation with migrants is different. An interesting fact is that the per capita income in Qatar is $88,000. But at the same time, the annual salaries of builders at the already mentioned stadiums do not exceed 2-3.5 thousand. This is for 6 working days a week for 15 hours daily!

The secret is that upon arrival in the country, workers renegotiate contracts, part with the promised monthly salary of $ 500, free housing and food.

Accordingly, the standard of living of immigrants differs significantly from that of the native. Therefore, do not rush to immigrate and obtain Qatari citizenship, take care of a good job and a high salary.

There are two ways to prevent the above surprises:

• Enlist the support of an experienced international litigation lawyer.
• To be well versed in matters of jurisprudence, to know the Arabic language.

Features of obtaining a work permit in Qatar

1. A work permit can only be submitted by a natural or legal person registered with the employment authorities. These applicants are usually the sponsors of future employees. Sponsorship and immigration are intertwined in Qatar.
2. After receiving an immigration card, you must register with the Department of Labor and apply for a visa. The gender, nationality and position of the hired workers must be indicated.
3. Once approved by the Department of Labor, copies of passports with appropriate education certificates must be submitted to the Department of Immigration in order for each worker to be registered with his or her work permit.
4. If everything goes well, the employee can get a residence permit.

Positive aspects of living in Qatar

The obvious advantages of living in Qatar include the following:

• High level of wages. True, one clarification needs to be made here – the level of remuneration is high either for local residents or for narrowly sought-after specialists. For an immigrant with no special skills working in the service sector, the salary will be 400-600 US dollars, while a Qatari citizen in the same position will receive at least three times more.
• Security. Qatar is one of the most peaceful countries in the region, terrorists are only mentioned in foreign news. Crime is at a very low level, you can safely walk at night not only in the center of the capital, but also on the outskirts of the city. And this is despite a relatively small (compared to the total number of inhabitants) number of representatives of security agencies.
• Attractions. The state is rich in unique architectural structures. The capital of Qatar – Doha – in itself is a masterpiece of building art. It surprisingly combines unsightly two-story buildings and breathtaking skyscrapers. You can get unforgettable impressions from visiting the local amusement park, the zoo, which is unique for the climate and the desert area, and the tour of the National Museum of Qatar will give you aesthetic pleasure. True, it must be clarified that none of the above will be photographed, since this action is prohibited by law (in relation to attractions, as well as police and military installations);
• Leisure. As mentioned above, the service sector is widely and professionally developed in the country. The tourism industry is not as developed as, for example, in the United Arab Emirates, but a person who has a sufficient amount of money will not be bored. Extreme safari, diving, rest on the coast of the Persian Gulf – all this will not hit the pocket hard for a tourist, a local resident, or even an immigrant who decides to forget hard working days for a day;
• Shopping. Although Qatar is an “expensive” country, it can be quite attractive in terms of buying cheap things. Shopping centers are located throughout the country, where you can stock up on inexpensive textile products, as well as jewelry. If the shopping trip falls on a sale or a “sales day”, then there is a high probability that the buyer simply cannot carry away all the purchases. But buying electronics or high-tech products is not recommended, primarily because of the price.

Negative aspects of living in Qatar

Unfortunately, there are also enough disadvantages in this country. The main disadvantages of the country are:

• By the type of terrain, the entire territory of Qatar is a desert. The weather also does not differ in variety – dry and hot gives way to very hot and very dry. So a person who does not tolerate heat well will not stay in this country for health reasons;
• Life in the country is very expensive. If the employer does not provide the immigrant with housing and food, then the very arrival in Qatar on a work visa will practically lose its meaning.
• Qatar, unlike the United Arab Emirates, is a fairly radical Islamic state. There are a lot of prohibitions for residents and immigrants associated with this. For example, if a visiting worker is caught in a “not very sober state”, deportation to their historical homeland will follow in the shortest possible time. Stricter restrictions apply to the month of Ramadan, when it is forbidden to eat any food or smoke in public places;
• Rigid working conditions. If a person from the post-Soviet space wants to go to work and live in Qatar, then he must be ready to work for two. The fact is that local employers are “sponsors” of visitors, paying for the flight to the country and the execution of all necessary documents. It is common practice for Indians or Filipinos to renegotiate employment contracts with unenviable terms (for example, with a salary of two hundred dollars instead of six hundred). One must also be prepared for such a turn of events. Until recently, it was not legally allowed to leave the country without the written consent of the employer. Also, a contractor is prohibited from looking for another job during the entire period of the primary contract (in most cases, this is two years).
• Problems with obtaining citizenship. It is extremely difficult for an immigrant to obtain Qatari citizenship. If the issue of obtaining a long-term work visa or even a residence permit can be resolved, then there will be serious difficulties with full-fledged citizenship. Firstly, the applicant will be required to live in Qatar for at least 20 years (if the applicant is an Arab, then 15 years). Secondly, the applicant must have legal sources of income and no complaints from law enforcement agencies. And thirdly, the immigrant must pass an Arabic proficiency test.

Expats living in Qatar may be interested in setting up their own company, small business or foundation. Later in this article we will be mainly focused on the question “How you can create a foundation in Qatar”. First of all let’s understand what is a foundation.

What is a private foundation?

A private foundation is a non-profit charitable organization that is usually set up by a single benefactor, usually an individual or business. Using this initial seed donation, known as an endowment, an investment is made to generate income, which is then distributed as grants to individuals or other charitable organizations in accordance with the foundation’s charitable purpose.

Many investment products can offer stable and consistent rates of return (think of your own savings account). Thus, the structure of private foundation donations provides a constant, stable and reliable source of permanent funds. This is important because budget and funding decisions can be made with more confidence. This ensures timely and effective access to the assistance that the foundation seeks to provide.

The main advantage of fund management lies in the degree of control available. The person in charge of managing the fund can decide who or what to support and make investment decisions. The board of directors of an organization may consist entirely of members of the same family.

However, the main criticism of private foundations relates to their operational independence. Their private source of funding allows them to ignore public opinion and possibly support socially controversial projects. In addition, they can generate sub-optimal results by misfocusing their efforts. Private foundations also have more binding paperwork (to ensure proper use of funds) , as well as minimum asset allocation requirements.

How to start a foundation in Qatar: Basic steps

When you have a cause that you care about and you’ve done your best to stand up for it, it might be time to start your own charity work to get your work out to a wider audience. Starting a foundation can be a big undertaking, but there are basic steps you need to follow to make sure you start on the right foot.

1. Define your mission

First of all, you need to find out the reason for your foundation’s existence. Be as specific as possible about your reason and see if you can come up with a unique point of view that will make your mission a little different from everyone else. For example, if you want to fight cancer, be clear about the type of cancer, the age group of the patients, or the direction of your efforts. Will you raise money for research or help families pay for treatment? Narrow down the scope and define your unique value proposition.

2. Choose a name

The choice of a name is critical. You want to choose something that is easy to remember so that your donors have no trouble finding you. Make sure that the name of your foundation is completely unique. Check your state’s list of existing nonprofits to make sure your name is not taken. You can also double check with the Department of Commerce to make sure the company has not already trademarked the name you are thinking of.

3. Apply for charitable status

Anyone can set up what they call a “foundation” and give away money, but to gain third-party trust and qualify for tax credits, your best bet is to apply for charitable status with the Charity Commission.

If you create a foundation, its income will be taxed. Therefore, it is much better to create a charitable foundation. This is fairly simple to do, and it provides a tax credit bonus on any capital gains the charitable organization may receive through the sale of shares. And you can claim Gift Aid for donations. It usually only takes a few weeks to set up. A trustee must be appointed and must meet several times a year.

4. Register with the IRS

To qualify as a tax-exempt non-profit organization, you must file with the IRS. In most cases, you will also need to register as a non-profit organization with your country secretary of state. Each country has different rules on what is required and it can help to hire a lawyer who works with nonprofits to make sure you have everything you need to make the application process hassle-free.

5. Set aside your political prose

Secondly, do not meddle in politics. You may have a lot to say about bailouts for the eurozone and Whitehall’s attempts to distinguish between an elbow and an ass, but no political organization can claim to be a charity.

So keep helping the underprivileged, fighting poverty, promoting education, improving medical knowledge, and upholding religious principles, and you will be fine.

6. Look at the long term

Funds not only allow business people to give back, they also allow them to use their entrepreneurial mindset for long-term sustainability. In many countries people are building a community with a school and a hospital and farmland so that it can feed herself and have food to sell. Another example can be a project using recycled newspapers to make envelopes that children with learning disabilities can sell to fund further work.

7. Start your legal works

Don’t think about starting a foundation unless you’re willing to put in a lot of time and effort. Selecting and funding projects and helping them operate effectively require resources.

It takes a lot of work late into the night to keep the foundation running, especially while doing your day job. And you need to recruit people who are willing to go beyond the call of duty and give their all to the foundation.

8. Consider a cheaper option

If all this seems too time consuming, there is a cheaper (and easier) alternative. Charitable relief fund (CAF) might be a better idea. There are virtually no overheads, and donations can be shared among charities already active on the ground. CAF is basically a bank account where you make one donation each year and then get a checkbook that you can use to donate to charity.

This makes filing a tax return easier because it’s only one payment per year, so the client doesn’t have to go through a bunch of paperwork to complete their tax return, and it doesn’t require any work to set up and manage their own fund. You can even create a CAF in your own name, the name of the foundation, or leave it anonymous.

What are the benefits of a foundation?

There are many potential benefits associated with starting a fund. For example:

• Having a separate organization solely dedicated to fundraising can enhance your organization’s ability to access the private sector and public funds.
• The fund will be managed by a separate board of directors. This can provide an opportunity for well-connected senior chairs and board members to lead fundraising efforts with vision and energy by donating significant funds themselves.
• Dedicated fund staff with the right experience can take the time to develop relationships with donors.
• A foundation can provide a distinctive “face” to a fundraising organization.

What are the potential disadvantages of a foundation?

Although there are many benefits to starting a fund, it is not an ideal course of action for every organization. There may be disadvantages associated with the creation and maintenance of the foundation. Here are some quick examples:

• The cost of setting up a separate legal entity, i.e. legal fees to establish a separate or independent foundation and obtain the appropriate tax and/or charitable status.
• Some organizations simply don’t have the capacity or expertise to set up and fund a separate Fund.
• There will be ongoing commitment to managing the fund, including reporting and regulatory requirements.
• The relationship between the fund brand and the organization brand must be carefully managed so that they reinforce each other rather than compete with each other.

Reasons why you should start a charitable foundation in Qatar

1. Tax incentives

Donating to charity can be an effective way to reduce income tax, especially if the donor’s income falls within a range that is subject to higher or additional tax rates. For tax purposes, the value of charitable donations is deducted from the total income of the donor. Charitable donations can also reduce taxable income for tax credits.

Taxpayers whose incomes vary and therefore pay different tax rates each year can even ask HMRC to have donations made in one tax year applied to the previous tax year to increase their personal tax refund. This can be beneficial to donors who face a large tax liability in one tax year but do not make charitable donations until the following year.

2. Leave a legacy

Starting a charitable foundation is a way to create a sense of permanence in the philanthropic efforts of an individual, family, or business. Such foundations, especially those created by families, seek to leave a legacy that future generations can carry on. Foundations are often based on the name of a loved one to honor the memory of a relative who died. Charitable foundations can unite family members around a common cause and create a stronger bond between relationships.

In addition to making donations through a charitable foundation throughout their lifetime, individuals can also make donations to their charitable foundation through their will. The foundation then used these funds to continue its philanthropic work after their deaths. Surviving family members may be pleased to continue the work of their relatives in order to remember them.